China exposure

After an initial surge following the reopening of China’s stock exchanges, investor enthusiasm quickly evaporated as hopes for detailed stimulus measures from Beijing fell short.

Jasmine Kang, Hong Kong-based portfolio manager at Comgest, recently visited Luxembourg and explained to Investment Officer how China sees the current global financial conditions as an opportunity to “decouple” and become more self-sufficient. China’s centrally managed economy is well placed in a world where rising interest rates, surging commodity prices and increasing geopolitical tension continue to haunt global investors.

With the Chinese government cracking down, foreign investors are reassessing their exposure to China. It is a balancing act between capitalising on the lucrative opportunities the country offers and protecting portfolios against the apparent arbitrariness of the government. The attentive investor can nevertheless hold on to a common thread.